Qantas Raising Cash

[DaveB]

6% is 0.06 so 0.006% is 0.00006

0.006 is 0.6%

I was starting to doubt my own calc's LOL, though had an excuse with my $8 Big W calculator unable to cope with the 33bn figure.

 

[trippin_the_rift]

I was starting to doubt my own calc's LOL, though had an excuse with my $8 Big W calculator unable to cope with the 33bn figure.

Jump on the QFF store. You can pick up a new calculator for only 250,000 points.

 

[medhead]

More noise about this proposal to sell points to the public. This time 42 billion points @ 1.2 cents. This has really got my interest up as to the possible effect. To that end I've started a google form for people to enter the points balance of the QFF accounts within there knowledge sphere to the nearest 1000. That will then allow calculation of an average account balance. IIRC a sample size of 100+ provides a good representation of the population, statistically. (plenty of academics on here to correct my recollection). I think the potential of very frequent flyers biasing the average is overcome by entering family member accounts as there is possibly only one frequent flyer per account.

I think if we get 200 to 500 numbers then a pretty good estimate should be obtained per member. From that the impact of selling points can be guessed.

I would ask people to contribute by using the following link. Obviously this is entirely voluntary in the interest of science (maths is a science). I promise to only release the average and the number of responses, back to the source of responses, ie not individually (since I don't know who has responded) but to the group by reposting in this thread. I will also delete the results once there are 500 responses, a response being an individual account balance.

The form allows for entry of 4 balances at a time. If your not happy with nearest 1000 even nearest 10000 should be ok.

I have not cleared this with AFF or admin or any of the mods. So it is not official AFF in any way. No doubt they will kill it if they feel it is inappropriate.

The link https://docs.google.com/forms/d/1dHJiiN83tirPn5u0xj04ax6N_x1qlPNVEzlqnCXvrnE/viewform

thanks in advance to all who contribute.

 

[MartinO]

Analyst: "Qantas should flood market with 42 billion (!) frequent flyer points"

An interesting alternative to Qantas selling off QFF (something I don't think will happen anyway)...

Qantas should hang onto its lucrative frequent flyer scheme and sell off "a large block of points" rather than the program itself to raise money, suggests one financial analyst.

In other words: instead of selling the goose that lays the golden eggs, just get it to lay more eggs.

42 billion more eggs, to be precise.

Analyst: Qantas should flood market with frequent flyer points - Flights | hotels | frequent flyer | business class - Australian Business Traveller

 

[dk4]

A Qantas Point is less valuable than a Zimbabwe Dollar?

Let's consider US Dividend Miles (which has been using this exact tactic to raise cash).

Recently I purchased a return First Class ticket to London with USDM for 150,000 miles plus a copay of a few hundred dollars (mostly made up of UK taxes).

The same return ticket with Qantas points (if you could find availability) is 384,000 -

• so even before you consider the copay, in this example US miles are more than 2.5 times more valuable than Qantas points.
• once you add the overinflated Qantas copay, including excessive fuel fees, that factor rises to more than 3

Now US is currently retailing miles (during share promotions) at 1.135 US cents per mile. So given this value factor of 3, Qantas needs to achieve a retail price around 0.378 US cents per point to reach parity with the US offer!

But considering the difficulty associated with redemption of Qantas points for premium international awards, even at 0.378 US cents per mile, I wouldn't be buying them as the risk is simply too high.

If Qantas starts selling points in this manner, I imagine all sorts of analysis like this would end up in the mainstream media, which would cause even more problems for Qantas and its over inflated ego.

Which is why, IMO, Qantas should sell its FF program lock, stock and barrel, before someone realises they are buying a whole load of... hot air!

 

[anat0l]

Re: A Qantas Point is less valuable than a Zimbabwe Dollar?

Let's consider US Dividend Miles (which has been using this exact tactic to raise cash).

Recently I purchased a return First Class ticket to London with USDM for 150,000 miles plus a copay of a few hundred dollars (mostly made up of UK taxes).

The same return ticket with Qantas points (if you could find availability) is 384,000 -

• so even before you consider the copay, in this example US miles are more than 2.5 times more valuable than Qantas points.
• once you add the overinflated Qantas copay, including excessive fuel fees, that factor rises to more than 3

Now US is currently retailing miles (during share promotions) at 1.135 US cents per mile. So given this value factor of 3, Qantas needs to achieve a retail price around 0.378 US cents per point to reach parity with the US offer!

But considering the difficulty associated with redemption of Qantas points for premium international awards, even at 0.378 US cents per mile, I wouldn't be buying them as the risk is simply too high.

If Qantas starts selling points in this manner, I imagine all sorts of analysis like this would end up in the mainstream media, which would cause even more problems for Qantas and its over inflated ego.

Which is why, IMO, Qantas should sell its FF program lock, stock and barrel, before someone realises they are buying a whole load of... hot air!

US DM is hardly in the mainstream media as it is (except possibly in USA and EU)! And that's been around for ages (not for much longer). What makes you think an analysis of it will be juxtaposed against a QF one?

In fact, I expect the media to do a more "pedestrian" calculation. For example, the points required (and thus cost) to fly one way to Sydney, to London, and for a family of four. Of course there will be some obvious du'h results there too.

FWIW for a goof, buying up a transcon JASA return would be about $900.

Buying points would be more suited to those who are a bit short of the mark (e.g. grabbing 20k points for $240). You can do that now as well but top-up points are a lot more restrictive.

I think all of us are well aware of the relative value of QFF redemptions (opinions ranging from niche to illegal). So I don't see too many here buying up points unless they had a particular strategy in mind.

With these points selling things, the programmes rely on two main things - "low value" redemptions and breakage. US DM is no different. If all US DM members who bought points in a promo truly cashed them in for all the best seats in the alliance, apart from probably not being able to get all such seats, not only would US DM be in a bit of a pickle, but I think Lufthansa would've been a whole lot more annoyed than they are now! If members only make low value redemptions (e.g. simple itineraries, domestic or intra-continental travel), it's better for the programme.

Breakage is easy - people forget to redeem their points and like a puff of smoke, they're gone. We know this happens often enough. Also applies to people with large FF balances who die. Free money to the programme.

As a final note, I doubt QF could flog 42 billion points.

 

[medhead]

Currently sitting at an average of 127000 from 40 responses. Would be really good to crack 100 responses.

https://docs.google.com/forms/d/1dHJiiN83tirPn5u0xj04ax6N_x1qlPNVEzlqnCXvrnE/viewform

More noise about this proposal to sell points to the public. This time 42 billion points @ 1.2 cents. This has really got my interest up as to the possible effect. To that end I've started a google form for people to enter the points balance of the QFF accounts within there knowledge sphere to the nearest 1000. That will then allow calculation of an average account balance. IIRC a sample size of 100+ provides a good representation of the population, statistically. (plenty of academics on here to correct my recollection). I think the potential of very frequent flyers biasing the average is overcome by entering family member accounts as there is possibly only one frequent flyer per account.

I think if we get 200 to 500 numbers then a pretty good estimate should be obtained per member. From that the impact of selling points can be guessed.

I would ask people to contribute by using the following link. Obviously this is entirely voluntary in the interest of science (maths is a science). I promise to only release the average and the number of responses, back to the source of responses, ie not individually (since I don't know who has responded) but to the group by reposting in this thread. I will also delete the results once there are 500 responses, a response being an individual account balance.

The form allows for entry of 4 balances at a time. If your not happy with nearest 1000 even nearest 10000 should be ok.

I have not cleared this with AFF or admin or any of the mods. So it is not official AFF in any way. No doubt they will kill it if they feel it is inappropriate.

The link https://docs.google.com/forms/d/1dHJiiN83tirPn5u0xj04ax6N_x1qlPNVEzlqnCXvrnE/viewform

thanks in advance to all who contribute.

 

[medhead]

Time to report back. This being a snapshot and all, it can't be kept open forever.

At a basic level the result is an average account balance of 147700 point (lets call this the base average) for 148 responses/ account balanced reported. This is a pretty good response.

I did promise to only divulge the average and N, but the max result is a bit of an outlier at 1,XY0,000. As I requested numbers to the nearest 1000, I suspect it could be a typo. Adjusting that one result to 1XY,000 gives an average of 138,400 points (corrected average). So the typo, if it is a typo, doesn't have much effect.

Now to do a bit of basic analysis for 8 million members we have the following points on issue:

• 1,181 billion - base average - 1 181 600 000 000
• 1,107 billion - corrected average - 1 107 200 000 000

Of those points amounts 42 billion points represents about 3.5%. As a strategy releasing the points into the market should only result in minimal devaluation of points.

I take on board the comments about the average being biased to the top end. To that end lets say that these balances are only due to the Gold and Platinum members (we know they aren't because I've included my NB family members). One figure I recall for the top tiers is 70000 members. Please let me know if anyone has a better number. That would then give total points pools of at least:

• 10.3 billion - base average
• 9.7 billion - corrected average

(Maybe it's just me but those numbers seem rather low)

Clearly releasing another 42 billion points (400% of the existing points pool) will have a significant effect.

Anyway, there is an average, time to work some numbers.


I'll close of the form on 31 December from responses. If there are any more numbers I'll update the average. Data to be deleted shortly after 31 December.

More noise about this proposal to sell points to the public. This time 42 billion points @ 1.2 cents. This has really got my interest up as to the possible effect. To that end I've started a google form for people to enter the points balance of the QFF accounts within there knowledge sphere to the nearest 1000. That will then allow calculation of an average account balance. IIRC a sample size of 100+ provides a good representation of the population, statistically. (plenty of academics on here to correct my recollection). I think the potential of very frequent flyers biasing the average is overcome by entering family member accounts as there is possibly only one frequent flyer per account.

I think if we get 200 to 500 numbers then a pretty good estimate should be obtained per member. From that the impact of selling points can be guessed.

I would ask people to contribute by using the following link. Obviously this is entirely voluntary in the interest of science (maths is a science). I promise to only release the average and the number of responses, back to the source of responses, ie not individually (since I don't know who has responded) but to the group by reposting in this thread. I will also delete the results once there are 500 responses, a response being an individual account balance.

The form allows for entry of 4 balances at a time. If your not happy with nearest 1000 even nearest 10000 should be ok.

I have not cleared this with AFF or admin or any of the mods. So it is not official AFF in any way. No doubt they will kill it if they feel it is inappropriate.

The link https://docs.google.com/forms/d/1dHJiiN83tirPn5u0xj04ax6N_x1qlPNVEzlqnCXvrnE/viewform

thanks in advance to all who contribute.

 

[puppysparkes]

Hi medhead I'll enter some data for my partner and I after 1/17/14. We have few more flight to go before then till our usual lull. Cheers

 

[cove]

Woolworths are already doing a great job of selling points for Qantas. I think the size of this loyalty scheme would amaze us all and I hope Qantas has priced it to their advantage.

 

[Simo]

Maybe they could sell some excess plane parts on Ebay

 

[Mal]

I'm more than willing to help Qantas.

149,000 points is redeemable for a Myer $1000 gift voucher. How about I buy one of the vouchers (from Myer) and give it to Qantas in exchange for 145000 points. They can then resell for 149,000 points to someone else in the FF scheme.

Win, Win, Win!!!!!

 

[medhead]

A few more numbers have been added average now 210000 base and ~156000 corrected for typos. N=200.

Hi medhead I'll enter some data for my partner and I after 1/17/14. We have few more flight to go before then till our usual lull. Cheers

I appreciate the data I'm really trying to get an instantaneous snapshot of the balance, so you can add the numbers now. Your extra flights coming in will not make a big difference.

 

[puppysparkes]

A few more numbers have been added average now 210000 base and ~156000 corrected for typos. N=200.



I appreciate the data I'm really trying to get an instantaneous snapshot of the balance, so you can add the numbers now. Your extra flights coming in will not make a big difference.

I entered data for my partner and I today, thanks for putting it all together.